Monthly Archives: December 2013

CNBC Admits to Calling it “Wrong” About Africa in 2013

"Africa disappoints"...Really? (A Nigerian consumer.)

“Africa disappoints”…Really? (A Nigerian consumer.)

Before giving their 2014 international predictions, CNBC reviewed their correct and incorrect predictions.  Actually, it was the predictions of Michelle Caruso-Cabrera, their Chief International Correspondent, who has a degree in economics. The only prediction that they said was “wrong” was her prediction concerning Africa. She said that Africa would disappoint, when in fact it has done the opposite…it has delighted!  Although there remain problems (as anywhere), many economies in Africa have done very well:

“But 2013 has been a good year too. Economic growth in many country’s (sic) has remained steady. Africa’s middle class is expanding.”

The problem here is that many of the U.S. and European correspondents, analysts and other assorted pundits don’t really understand and/or study and follow Africa.  Even watching the current predictions for “emerging markets” and “frontier markets” in 2014, it can be observed that many of them seldom mention African countries as growth opportunities, and yet that is actually the case!

However, we here at Africa Investment Report will continue to “do our homework”  and look for practical opportunities for you to invest in Africa.  Be sure to sign up in the box to the right for updates, and as a gift for doing so, get our FREE report: “How to Profit From Africa’s Growth Without Leaving Home”.

Richest Man in Africa Inadvertently Gives Us Reasons to Invest

Dangote

Aliko Dangote

 

An article in this past weekend’s Wall Street Journal, “Africa’s Richest Man Bets Big on Oil Refinery”, discussed Aliko Dangote, arguably Africa’s richest man, who plans to build the largest oil refinery in Nigeria, his home country.

One of the things that’s interesting about the article is that what he sees as reasons to invest should encourage us to invest by including Africa in our portfolio:

1. Look for stocks that bet on the growing middle class and their consumerism.The article says that Dangote’s investment in this new refinery “…is a bet that Africa’s economy will keep growing faster than the rest of the world, especially as a wave of consumerism sweeps the continent.”

2. Find stocks that might benefit from Africa’s appetite for oil.  According to the article, Africa is predicted to become the largest oil consumer.  Companies that are looking to not only drill in Africa, but also to refine and sell at the retail level (think gas stations and convenience stores with gas stations) would be possibilities for investment.

We here at Africa Investment Report will continue to look for opportunities for you to invest in Africa.  Be sure to sign up in the box to the right for updates, and as a gift for doing so, get our FREE report: “How to Profit From Africa’s Growth Without Leaving Home”.

How Much Should You Invest In African Stocks?

株価

Many investors would like to invest in African stocks, and not are not only concerned about what to invest in (which is where the African Investment Report comes in), but also about the risks involved.

You shouldn’t allocate 100% of your portfolio to African stocks, but how much?  Many used to recommend somewhere around 2% of your portfolio to emerging markets and/or frontier markets.  Now there is an article in a recent Barron’s that recommends at least 20% to “emerging markets”, plus-or-minus, depending on your risk profile.

When emerging markets are mentioned, there are different definitions, one of which is the BRICS countries, which include South Africa.  This is interesting, because many companies based in South Africa are expanding into the rest of Africa, particularly sub-Saharan Africa. Other companies might be headquartered in the frontier market countries, such as Nigeria, Ghana, or Kenya.  There may be some good buys with stocks of companies in those countries as well.

And this 20% doesn’t have to be in all Africa-focused companies.  Although Africa is the economically fastest-growing continent in the world, there are other great buys outside of the U.S. in Europe, Latin America and Asia.

As the article points out, an important point here is diversification.  Get ready for the coming years; not just the coming year. And stick with the Africa Investment Report, so that we can keep you current on what’s going on in Africa.

Africa Poised for Growth in 2014

 

goldener globus

It looks like most of the “prognosticators” are predicting that Africa as a whole, particularly sub-Saharan Africa, will continue to grow.

The Economist, for instance, is predicting through The Economist Intelligence Unit, that Africa’s GDP will grow by approximately 5.5% in 2014, “faster than any other region in the world.” They are also predicting that for the first time in a long time, GDP growth will overtake inflation.